Thursday, October 22, 2015

SEC to implement Title III of the JOBS Act

Yesterday, the U.S. Securities and Exchange Commission (SEC) announced "that it will hold its annual Government-Business Forum on Small Business Capital Formation at its Washington D.C. headquarters on Nov. 19, 2015. The morning session of the forum will feature panel discussions on exempt and registered offerings occurring after the passage of the JOBS Act." You can register for the forum here.

We think the SEC will use this opportunity to release the final Title III crowdfunding rules. As I describe in my book on the JOBS Act, small businesses and startups will be able to raise up to $1 million in equity (or debt) funding online via what are called Crowdfunding Platforms―online communities and websites. Imagine an eBay-like site that allows you to post your idea for a commercial venture online and then allows investors to purchase equity shares or stakes in it.

Recently, two state securities regulators (Montana and Massachusetts) brought a suit in the United States Court of Appeals for the District of Columbia Circuit against the SEC to block the rules implementing Title IV of the JOBS Act. Title IV allows companies to raise up to $50 million. We were recognized as a "Friend of the Court" in the action, and suggested the Court vacate the Title IV rule, subject to the SEC immediately implementing Title III of the JOBS Act.

I think they will use the Forum as an opportunity to do so. Now, I am not suggesting that just because I urged a Court to tie their Title IV decision to Title III, the SEC will act. (I don't have that kind of influence AT ALL.)

On Wednesday, September 16th, I spoke at a roundtable on crowdfunding at the Embassy of Italy in DC:

Also speaking was the Special Counsel for the SEC in charge of implementing Title III. He did not say anything that could be directly interpreted as supporting my statement, but he did acknowledge that the SEC is very, very late with implementation: under the JOBS Act, they were to have Title III regulations in place by 12/31/2012.

I also noticed that the summary of the Title III rule on Reginfo.gov has a date listed for the implementation of final rules governingTitle III: Final Action -10/00/2015.

I think this means they will announce the final rules on the 19th of November, but, of course, I could be wrong.